From 1 July 2019, all businesses that tender for new government projects valued at over $4 million will be required to provide a satisfactory Statement of Tax record (STR) from the ATO.
The statement will be based on details held in the ATO systems including information supplied by the taxpayer under the self-assessment system and statements made by the taxpayer when requesting the STR.
The ATO will build an online system that will enable businesses to request and receive these statements within four business days. The STR will be valid for 12 months from issue. It is expected that most businesses will be able to obtain the STR without any difficulty.
A satisfactory STR will be issued if the tenderer:
- is up-to-date with registration requirements (e.g. the entity has a TFN, ABN and is registered for GST)
- has outstanding debt with the ATO is not $10,000 or greater at the time of issue of the STR (excluding debt subject to objection, review or appeal)
- has lodged at least 90 per cent of the following obligations that were due in the last four years or the period of operation if less than four years:
- Income tax returns
- FBT returns
- Business activity statements
An STR will be required for all types of business structures such as companies, trusts, partnerships and joint ventures who are tendering for a government contract. For trusts and partnerships, the STR will be required for the subject entity as well as each trustee or partner. The head company and subsidiary tenderer will be required to produce a valid STR where they are part of a tax consolidated group.
If an unsatisfactory STR is issued, it is understood that the tenderer will be able to work alongside the ATO to take corrective action.
If you are planning on tendering for a new government contractor from 1 July 2019, please contact your accountant at Brentnalls SA with any questions.
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The information provided in this information sheet does not constitute advice. The information is of a general nature only and does not take into account your individual situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.